Bank IT Outages: The Impact on Customer Loyalty, Sentiment and Behaviour Write-Up
On the 4th of February, 2025, FinTech North’s community came together virtually to hear insights on another pertinent sector topic: Bank IT Outages: The Impact on Customer Sentiment, Loyalty and Behaviour. The webinar was hosted in partnership with digital transformation experts and FinTech North Strategic Partners, GFT.
The webinar followed the publication of GFT’s most recent Banking Disruption Index (BDI,) which provides detailed insights into consumer attitudes towards digital banking. Click here to download the report and find out more. To watch the webinar in full, click the link below:
https://www.youtube.com/watch?v=4fFlI34qCc0&t=2043s
Joe Roche, FinTech North’s General Manager shared a welcome to delegates for joining and to GFT, provided an overview of the organisation, strategy and upcoming events, before handing over to Alex Selwood, Partnerships Director at GFT to moderate the remainder of the session.
Alex similarly welcomed attendees, and provided some context around GFT’s expertise in technological engineering globally over 40 years, particularly excelling in Financial Services in the UK by delivering transformative platforms to their partners. She then welcomed Richard Kalas, GFT’s Client Solutions Director to the virtual stage to delve into the findings of the Index.
Richard shared the story so far, reviewing previous findings from past indexes from 2022 to date:
- The initial BDI showed 48% of customers do not trust their bank to manage their finances during a recession, and 67% would prefer to use an app for their everyday banking needs.
- Then we found 77% of customers felt anxious when checking their mobile banking apps, and 43% preferred to liaise with their bank digitally.
- Later reports showed only 26% of consumers understand their banking providers’ foreign spending fees, and 32% did not think the fees were reasonable.
- More recently GFT discovered 61% of consumers were happy with their bank to use AI to support them.
He then turned to the most recent BDI, which addressed customer concerns around bank resilience amidst IT failures and their impact on trust in financial institutions, as well as public sentiment towards cashless society and the role of cash as a backup, with the aim of providing valuable insights for the banking industry to tailor their approach to digital banking resilience.
The webinar featured several interactive audience polls, in which delegates shared their levels of concerns around IT failures and cyber security. The results largely reflected the findings of the BDI, which detailed:
- 34% of UK adults are worried about potential IT failures at their banks.
- 24% believe that IT failures will worsen with further digitisation.
- 42% of individuals fear cyberattacks and data theft due to outages.
- 38% are concerned about third-party technology vendors causing IT outages at banks.
Alex Selwood then welcomed Martin Reynolds, Field CTO at Harness to join the discussion. Harness, as well as being one of GFT’s partners, work with some of the largest banks in the world, providing an end-to end software delivery platform that supports engineering teams using the power of AI. He noted the importance of trust and reliability in banking systems through resilient software, highlighting the importance of embedding resilience against failures into software, ensuring that banks have remediation strategies in place and implementing these measures in banking delivery cycles across the UK.
Richard explored why banks seem to be more prone to outages, citing several factors; many banks have significant investments in legacy technology, making it difficult to transition to newer systems. Whilst banks aim to invest in and evolve their technology, legacy systems are deeply embedded due to years of development. Additionally, major banks have often grown through acquisitions, leading to duplicate systems performing the same roles within organisations.
The discussion also touched on the impact of digital transformation, as banks must keep up with disruptors whilst navigating the complexities of existing infrastructure. The potential for disruption is high, as banks are deeply embedded in consumers’ daily lives. He pointed out that many organisations experience failures, but they may not be as obvious. Unlike services such as Netflix, which customers ‘love but don’t need,’ banking is a necessity rather than a luxury, making system reliability crucial. The panellists noted that banks and new entrants have fewer complexities, allowing them to adapt more quickly. Martin stressed the cruciality of modernising systems for banks to remain competitive and even get ahead of disruptors.
When asked about practical steps banks can take to reduce the risk of IT failures, Martin outlined several key approaches. He emphasised the importance of detecting problems early in deployment, implementing modern software delivery practices and integrating operational resilience strategies. Introducing policies, resilience testing, and tracking changes throughout the testing process can significantly reduce risk. Whilst these measures will not eliminate risk entirely, they will enable banks to respond quickly to issues when they arise.
The audience were highly engaged, submitting questions via the Q&A function throughout the session. One audience member asked why financial institutions do not simply start from scratch to avoid the aforementioned challenges. Richard acknowledged that whilst some organisations take this approach, such as Salt Bank in Romania, which was built and launched within 12 months in partnership with Engine by Starling, most banks opt for iterative renovation. Building a new bank from scratch requires significant investment, and banks must weigh the cost against potential competitive threats.
Another audience member enquired about the tangible impacts of IT outages on customer confidence, such as balance withdrawals or reductions in customer numbers. Martin shared a case study from a US bank, where they tracked the correlation between system migrations, outages and customer satisfaction. By using customer satisfaction as a key performance indicator, they aimed to drive best practices and improve system resilience. Richard also discussed findings from the BDI regarding international spending, showing that many consumers are aware of alternative banking options and seek contingency plans rather than relying solely on a single provider.
When asked whether concerns about IT failures varied across demographics, Richard explained that younger consumers tend to be more relaxed about sharing their data and interacting with digital banking services. In contrast, older demographics take a more cautious and deliberate approach before engaging with technology.
An audience member then asked whether customers who experience outages expect remediation. Richard addressed this, noting that operational efficiency improvements are a priority for banks to enhance their response to outages.
The discussion also covered resilience legislation, with upcoming regulations in Europe similar to those in the UK. Martin emphasised that resilience testing involves deliberately breaking systems in pre-production environments to assess their stability and recovery mechanisms. Since banking systems are highly complex, testing allows organisations to identify weak points and develop automated recovery strategies. The DORA regulation, for example, requires financial institutions to demonstrate they have these processes in place.
Another question raised concerns about AI’s role in cybersecurity. Martin explained that Harness uses AI to remediate security issues more efficiently, ensuring software meets the same security standards as customers. Whilst AI raises data security concerns similar to broader data privacy issues, firms must ensure they handle data responsibly. Richard highlighted a trend in which banks use chaos engineering techniques to intentionally disrupt systems and monitor responses, ultimately strengthening resilience.
The final audience question explored why IT failures in banking continue to increase despite their severe consequences. Martin noted that whilst financial institutions prioritise quality, regulatory requirements can make compliance cumbersome. Manual processes are often outside core job functions, making them challenging to enforce consistently. The push for rapid innovation has exacerbated these issues, but banks are increasingly adopting automated quality control measures to integrate compliance seamlessly into development workflows. Codifying policies ensures that best practices are intuitive for engineers, reducing the risk of human error.
To conclude, Alex asked Richard and Martin to reflect on what they expect to see in the future of IT resilience in banking. Richard predicted that banks would continue investing in tools to improve operational efficiency and deployment integrity. AI will play an increasing role in quality control, testing and debugging. Martin added that many banks are investing in modernising their software development life cycles, using feature flagging to enable smaller, low-risk changes that enhance customer experience. Quality control will remain a priority as banks evolve to meet technological and consumer expectations.
We’d like to share a big thank you to everyone who attended and participated in the session, and to our event partners, GFT, for sponsoring and sharing their valuable insights with our community.
